NEW YORK (
) -- Do-it-yourself projects are expected to boost
in the second quarter.
The two retailers are set to report earnings next week and analysts say small-ticket items like garden supplies and paint could have helped both companies during the quarter.
Analysts on average expect Home Depot to report earnings of 58 cents a share and Lowe's of 53 cents.
"One choice that consumers have made during the recession's belt-tightening has been to fire gardeners," J.P. Morgan analyst Christopher Horvers wrote in a note. According to the National Gardening Association, seven million more households planned to grow their own gardens in 2009, up 19% from 2008.
But wet, cold weather in both June and July may partially offset any of these gains. Horvers forecast a 7% same-store sales decline at Lowe's and a 7.5% drop at Home Depot.
Citi analyst Deborah Weinswig expects a more modest 6% decline at Home Depot, noting that management said May same-store-sales were trending better than April's 7% dip.
Both retailers will also be pulled down by big-ticket items. At Lowe's, sales in this category were double-digit negative in the first quarter, and Weinswig expects a similar trend in the second quarter.
Shares of Lowe's were down 3% to $22.68 in morning trading, while Home Depot slipped 2% to $27.12.
Lowe's will report earnings before the bell on Aug. 17 and Home Depot on Aug. 18.
-- Reported by Jeanine Poggi in New York.
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